The Dangote Cement company says the cement bag cost price reduction was not meant to kill competition in the sector but to ensure that cost of building in Nigeria is gradually reduced.
The Group Managing Director of Dangote Cement, Devakumar Edwin, told Channels Television on Friday that the supply of the product had far outweighed the demand and that it called for price reduction to ensure that buyers would benefit more.
The decision to drop the price of cement had triggered fears that other cement companies, selling higher than the current price of 1,000 Naira and 1,150 Naira for the different qualities, would lose customers and in turn stop production.
Mr Edwin said that Dangote’s current production capacity is 29 million tonnes, which is enough to supply to Nigerians and even to neighbouring countries.
He said that the 40 per cent reduction in cement price should not be a source of worry to competitors, insisting that most competitors had been in the business for decades before Dangote started production and that they should have a fair share of the market.
“We are not trying to gain monopoly of the market by reducing cement price. Our competitors have been in the business for decades and should be at a better position than us. We have gotten a positive reaction from consumers. They are happy and the dealers are happy.
“To regulate the price, we have developed three different channels of distribution.
“We have a direct distribution from the plants with our fleet of 6,000 trucks that will deliver the cement all across the country. Once we confirm that payment has been made, the cement will be delivered to your door step. The minimum order is a trailer load,” he said
He also stated that there were more than 50 depots all across the country and that the mechanism would truly help control the price.
“We have more than enough cement to supply to Nigerian market and we are labelling cement bags based on what they should be used for,” Mr Edwin further explained.
Though the cement price had been reduced, Mr Edwin said there may be added costs for VAT and transportation in some parts of Nigeria.
An additional cost of transportation for one bag is 100 Naira in the south east, south-south and south-west, 150 Naira in the middle belt and 200 Naira in the north-east and north-west.
He also said that the labelling of the bags was aimed at ensuring that the products are properly used for the right purpose, expressing hopes that the strategy, as ordered by regulating agencies, would help reduce cases of building collapse across Nigeria.
The Dangote company has also provided an online registration portal on the company’s website for potential distributors to ensure that the products are made available at different locations in Nigeria.